SCA sells sanitary protection in the Middle East,
one of the hottest markets in the world but also
difficult to navigate. For clever and courageous
players, there are enormous opportunities.
“After China and India, the Middle East is the most dynamic market in the world and it’s at the top in growth in purchasing power, although in many cases that is still unevenly distributed,” says Peter Dahlqvist, who is responsible for SCA’s efforts in the region.
Last fall, SCA began collaborating on a joint venture with its local partner Nuqul in Jordan. The new company will manufacture and sell sanitary protection in 18 countries in the region.
“The strict religious traditions in countries like Saudi Arabia can be a challenge, for example, when you want to market products,” Dahlqvist says. “The taboos relating to menstruation make it extremely important that women keep it concealed, which means women consumers choose quality when they buy sanitary protection.
“There are many reasons for SCA’s investment in the Middle East. In consumer goods and the retail industry, the demographics are a strong driving force in regions that has large families. In Saudi Arabia, 38 percent of the population is under 15.
“Even though the country has only one-third the population of Germany, there are more children in Saudi Arabia,” Dahlqvist says. “That creates a big market for diapers today, and in the next few years demand for menstruation protection will increase.” ”In the past, the wealth from the oil was unevenly distributed, and the wake of the resulting discontent has caused instability in the region. Paradoxically, this is putting pressure on the oil princes today to spread the economic well-being, he explains.
“A growing, flourishing middle class is in fact often the basis for stable growth,” Dahlqvist says, pointing to countries such as Tunisia, Jordan and the United Arab Emirates.
The feminine care products are sold under Nuqul's brand Cinderella.
The turbulent political situation has kept many players out of the region. But today the trend is starting to turn. For instance, the French retailer Carrefour is investing heavily in the region.
“As for SCA, it means we can be in a market that has really strong growth potential early on,” Dahlqvist says. “Procter & Gamble is the only one of our global competitors to set up operations here.
“It’s often an advantage in today’s polarized global politics to be a European company in the region, although our Danish neighbors have seen how quickly things can change.”
SCA in the Middle East
- SCA´s joint venture in Feminine Care (with Nuqul Group) started in October 2007.
- SCA sells products under Nuqul's brand Cinderella.
- The market consists of towels, while liners are starting to appear in some markets. Tampons are almost nonexistant.
- The main markets for SCA today are Jordan, Egypt and Saudi Arabia.
- The main potential in the Gulf is Egypt, Iraq and Iran.
Text: Mattias Andersson
From SCA's corporate magazine SHAPE 3/2008